EP367 Kerri Growth Starts

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Kerri Growth Starts

This particular episode is about starting a new employee, partnership, or a new vendor. What do we look at? What are some of the angles we go about in doing that? I’m going to pepper my beautiful bride, Kerri, with these questions. I’m going to talk about keeping, nurturing, and growing an employee, a partner, a coach, or a vendor. We’re going to start with an employee. The first thing I have to ask since 20% of our audience are wired just like me, I need to be very honest with our audience and share with them, how do we hire employees?

Years ago, we had a need and we filled it. We bent over backward to make sure that whoever we hired was one, good at what they did. We did a lot of whatever they needed in order to keep them happy. We wanted to keep our employees happy. Sometimes, we overlooked things that we shouldn’t have overlooked because we wanted them to stay in that position. It’s hard to find employees that fill a need.

Let’s say three years ago, how would it come about that we needed a new employee in a new position and how would we hire them? How would we decide what to pay them? Set the foundation for three years ago.

We would call up a company headhunter and help us find someone. Their job was to find someone. We set the pay scale, we would look online and get an idea of what someone should be paid. Most of the time, we would pay our employees more on the heavy side. We do look at what they did in the past, but we took their word for how good they are.

Years ago, we were growing like a weed. It would go something like this, “Ken, we need someone in graphic design.” “Okay, go get somebody.” Six weeks later, “We found someone.” “Great.” I wouldn’t ask what we should pay them. I would find out six to twelve months later that not only were we paying them drastically over an average normal graphic designer scale, I would even find out, as did my beautiful bride, that in many cases, within the first eighteen months, they were getting 10%, 20%, 30%, 40%, 70%, even 130% raises just for being here and being a good person.

Our employees have a lot they’re qualified at. At that time, we did not offer health insurance. Our company was under the range and many of our employees already had health insurance, so we didn’t need to do it. We didn’t necessarily have a real need for it via the employees asking for it. The overcompensation was, “If you’re paying for your own healthcare, even though it was way over what healthcare would cost, that was the justification for it.”

Tell everybody how we hire employees now.

It’s drastically different. Being an owner in one state and having our employees in another state, there was a lot of leeway there. We got to a point where our company was big enough that we needed to start doing many overhauls and cost analyses in almost every single department. When your expenses get bigger, a lot of expenses can be hidden. We decided that we would definitely take a bigger delve into understanding what the expenses were, how to justify them, and how to cost justify them. We have so many wonderful site partners that we needed to be accountable to them too. In doing that, we realized that a lot of what we were doing wasn’t necessarily wrong, but we were overcompensating for what the output was.

Now, what do we do? In terms of the employee, no one is hired without a clear job description, not a blanket. “I need an accountant.” “An accountant is someone who looks at the books.” That’s not how it goes. If you’re going to be hired as an accountant, there’s a sheet of exact expectations of what your responsibilities are. When you don’t have accountability to a responsibility, it’s easy to pass the buck to somebody else. The second thing that every employee must have is a measurement tool. Not only if I’m hiring you as an accountant, I have an expectation. You are to meet my criteria of ABC. You are constantly being evaluated whether or not you are achieving your goals. If you achieve your goal 90% to 100% of the time, you’ll have a decent raise. If you achieve your goal, 78% of the time, you might get a semi-raise under that 5% or 6%. If 60% of the time you meet your goal, you’re lucky to keep your job. Under that, I’m sorry, we’re going to part company.

Not only is there a clear job description, there are clear measurement tools for each person. Now that we have a lot of employees, we looked at hiring an HR company. At that time, when we were looking, we couldn’t cost justify having our own in-house HR department. We looked at having a part-time, but it was much more beneficial for us to search for a company. We went through a whole bunch of companies and then landed on one particular company. At the same time, we were looking for health insurance.

This company came in and not only do they do all of our HR, but they do all of our health insurance, everything. They do all that tasks. That’s taken away from us when you’ve got fifteen employees. That’s a lot of time right there. When you’ve got twenty employees, it’s more time. By the time you end up having 50, 60, 70 employees, if you’re the owner of the company, that is something that you can pass on. When you get there, you need to pass it on. We found a company to do our HR, which keeps us in compliance. Nowadays with the legalese, everybody wants to have an attorney. It’s great when you have a company that their specialty is HR information or HR expertise in lawyer and in compliance.

When you don’t have accountability to a responsibility, it’s easy to pass the buck to somebody else. However, we hire now with clear job descriptions, a zero to ten scale. If you hit a ten or a nine, you get a raise. If you get an eight or nine, you get a half a raise. Six or seven, you keep your job. In five and under, you don’t have a job. We’re a little bit tighter to say the least. Years ago, we met a great vendor in Europe. We onboarded them in a certain way that’s drastically different than the new onboarding we did last time. Can you share the difference in our company of how we onboard an affinity partner, somebody that’s become a big part of what we do?

The bottom line is it’s all growing pains. It’s like having a child, you’re very different from the first kid to the second kid. You’re in grammar school and you color outside the lines. As you get older, you learn how to refine and shape. That’s the same thing. What we used to do is we would find a need. We were growing exponentially. We didn’t have our all-hands-on-deck. To grow correctly, you need to grow measuredly in terms of your expenses. Often to help that, you outsource and that’s what we did. We would find a need and we would outsource. Luckily for us, we’ve got some sharp people who work at the company.

Everyone is sharp at the company now as you can tell from our KPIs. They would see these vendors and then they would make a notation. Unfortunately, for us being the leaders, we were slow to act. Now we’ve learned, been burned, and we are quicker to act. When they see a red flag, we act immediately upon it. We isolate it and take care of it. At that time, the old way was, “Find a vendor to fill the need.” Now, we find a need and we vet and vet and vet the vendor. You don’t have to vet the vendor and take a year to have them onboard. That’s not the point. The point is to ask the key questions, “Who, how, can you, will you be able to scale with us? What can we do? We not only want you to scale with us, we want to learn from you.”

Part of the requirement when you’re working with us is teach our staff because we’re going to go faster. Often, we are going to scale faster than the vendor that we’re using. We’re going to use their expertise and then have our own team grow simultaneously. Our newest vendor that we have working with us, he was so excited for us to mimic. Within our agreement, even though our team is growing, he gets a piece of that because he has intellectual equity, which is what we are purchasing from him. It was drastically different going from just filling the need to actually fill in the need with a lot of background checking and verifying.

Now, we bring our team on board. Our team, the key people who are going to do the work, have the conversations with them. In the beginning, we would hire someone and then they would report to us. Ken and I are moving a lot. We have different responsibilities. We’re not in the day-to-day part of the business. The people who are doing the day-to-day are brought in and they have an easier time to see the successes or the future failures of working with this vendor.

I’m going to summarize what Kerri said. Kerri and I went to Europe and we vetted a vendor. We came back with a decision. Our team, who ended up working with the vendor, spotted some red flags and finally convinced us to stop working with that vendor. With this newest partner, we brought the partner into our office. We let our team be there with us while we were vetting this young man because they’re the ones that are going to sniff everything out. It’s a subtle difference, but it’s absolutely huge. I want to summarize and wrap up with this one question. If you’re bringing on a new employee or a new partner, is there a couple things you’re looking for or a couple of things you’re looking to avoid? How would you summarize onboarding a new person with the size of our company now?

The number one thing is clarity. When everyone knows what’s expected of them, they will do that and they will want to achieve it. The worst thing I hate is when someone says, “I’m not sure. I don’t know.” “Do you want to go to the movie?” “I don’t know.” Indecisiveness is a waste of time because you can’t move one way or another. If you’ve got a clear yes or no, which are clear responsibilities, you know which way you’re supposed to go and you can be much more efficient.

The key is if you’re going to onboard somebody, nothing trumps the clarity of both parties. This episode is The Wisdom of Kerri Courtright for Onboarding People.